Supporting Somerville restaurants by capping fees charged by third party delivery services during the COVID-19 State of Emergency.

Information

Department:

City Council

Sponsors:

Ward Three City Councilor Ben Ewen-Campen, Ward Two City Councilor Jefferson Thomas ("J.T.") Scott, Ward Four City Councilor Jesse Clingan, Ward Seven City Councilor Katjana Ballantyne, City Councilor at Large Kristen Strezo, Ward Six City Councilor Lance L. Davis, Ward Five City Councilor Mark Niedergang, City Councilor At Large Mary Jo Rossetti, Ward One City Councilor Matthew McLaughlin, City Councilor At Large Wilfred N. Mbah, City Councilor At Large William A. White Jr., i and the Mayor

Official Text

WHEREAS:The coronavirus pandemic is having a profound impact on local restaurants, including a complete shutdown of in-person dining; and

WHEREAS:Those restaurants that have remained open are forced to rely entirely on revenue from pick-up and delivery orders, which requires many such restaurants to be newly reliant on a small number of “third party delivery services”; and

WHEREAS:Many of the widely used third party delivery services charge fees as high as 25-30% per order, which represents an enormous burden on already-struggling businesses who have lost all in-person dining revenue; and

WHEREAS:This issue has prompted communities across the country to take action in support of local restaurants, including Emergency Orders in San Francisco and Washington D.C., that cap delivery fees at 15%, as well as Resolutions in several of our neighboring communities in support of a statewide cap on delivery fees in Massachusetts; NOW THEREFORE BE IT:

RESOLVED:That the Somerville City Council and Mayor call on the State Legislature to pass HD.5054, “An Act relative to restaurant delivery commissions during the COVID-19 state of emergency” that would limit delivery fees to 10% per order for any restaurant with less than five locations; AND BE IT FURTHER

RESOLVED:That the City of Somerville explore all legal options, including any Emergency Powers, to enact a local cap of 10% on third party delivery fees; AND BE IT FURTHER

RESOLVED:That the Somerville City Council and Mayor commit to working with local restaurants and business development organizations to promote public awareness of this issue, and of the benefits of ordering directly from local restaurants, and of the benefits of ordering take-out whenever possible; AND BE IT FURTHER

RESOLVED:That a copy of this Resolution be sent to all members of our State Delegation and to Governor Baker.

Meeting History

Councilor Ewen-Campen said many businesses are dependent on third-party delivery services like GrubHub, UberEats and Doordash, which charge outrageous fees, up to 25%-30% per order. Many communities have capped such fees to protect local businesses that are already suffering due to COVID-19, but Somerville doesn't have the legal authority to do so, so he urged supporting HD.5054 to cap the fees statewide for the duration of the pandemic. He also encouraged ordering directly from restaurants instead of third-party services. Councilors Clingan and Davis said business owners are in favor of capping these fees. Councilor Ballantyne said she would file a late Order that the Communications Department urge residents to order directly from businesses. Councilor Davis noted that some third-party delivery services websites mimic the local business websites to draw traffic.

Ms. McGettigan explained the Law Department's response to this item saying that a city can't interfere in a civil relationship as it would be an illegal use of the city's legislative powers. Councilor Ewen-Campen noted that there is a bill in the legislature (H5054) to address this issue and he was wondering if there was anything that would allow this under the emergency orders related to COVID-19. He's hopeful that the measure will moved quickly at the state level. Chair Davis feels that this is an important issue and would like to look into this further to determine if there is a way to accomplish this. Mr. Shapiro will pass this along to the Attorney General’s Office to get clarity on what is an "incident to an exercise of an independent municipal power".